Sunday 4 November 2012

Election Week : Betting on Obama and Xi jinping

This week we will witness the election of  2 presidents from the 2 biggest economies of the world .. US & China. So this week , we take a break, instead of picking stocks , we pick presidents.

On Nov 6 , we have the US presidential elections, and on Nov 8 , the Chinese starts its 18th party congress culminating in the election of their next CCP leader, Xi JinPing.



In the US, despite unfavorable unemployment data , and despite what the opinion  polls like above says about the election results being a close call, a cliff hanger , nail bitter or in dead heat ( click here) , my bet is that Obama will be re-elected convincingly to a second term , for  reasons of favorable demographics ( seniors , uninsured , students , blacks, hispanics , women , sufferers of hurricane Sandy, lovers of Big bird , auto-workers in Detroit, fans of Bruce Springsteen,  and last but not least the 70% of americans who think they belong to the " 47%  victimized camp "  blackmarked by Mitt Romney..

Into this election, I think the dark clouds over the fiscal cliff problem may be lifted momentarily leading to a very small very short election  rally of sorts in the Dow before a big reversal post elections , when the electorate votes in a more pro-Democrat congress ( Senate and lower house )  and votes out the tea-party to resolve the grid-lock in Washington and to approve a grand bargain..hopefully .. 

In China, every time there is a party congress, the CCP will prop up the Chinese stockmarket  ie the SSE ..   this year should be no different and the SSE is already showing signs of strength, readying for a small rally  . In fact, the HSi had already charged ahead of the party congress for the past 2 months since 7 sept , quite independent of the Dow.  



In 2007 , we had a super rally 3-4 months into the 17th party congress ( 15 to 21 October 2007 )  with SSE peaking on the 16 oct 2007 and HSi peaking on 30 oct 2007. but that was then , the superbull before the great recession..

So what stocks are in play this week ? -   selected china related stocks that may benefit from some big announcements from the 18th party congress.  

Because Friday nite we had a 139 pt plunge in the Dow,  so Monday should see a open gap down .. upon which selected china related stocks may rally .,( click comments section below for any updates on particular china related stocks ) 

21 comments:

Anonymous said...

Hi Bill

Are you able to advise on the list of selected china related stocks?

Thanks!

Anonymous said...

Hi Bill,

Do you expect a major sell off once obama is re-elected for second term.

Whats your view on china stocks, e.g China Minzhong and Yangzijiang

Thanks.

Ex.

Bill E said...

i think china related infrastructural stocks should do well due to big stimulus coming in infrastructure to be announced at party congress - cosco , yangzijiang, capland , glp etc but be quick to take profits

Pipa said...

and what if romney wins?
what scenario can we expect?

-Thanks

Anonymous said...

yanlord 1.29 now. Bought earlier at 1.23

thanks Bill'

ps. may i know what is ur email address ?

Bill E said...

welcome , tks my email : bille33333@gmail.com

looks like Obama won and Dow rallied as predicted ..

Anonymous said...

Hi Bill

I notice you mentioned for the China infra stocks " but be quick to take profits " . Does it mean you do not expect a rally after the CCP convention?

I notice you did not mention Midas. I thought that would be the most likely China Infra stock...is there a reason why it was left out?

Thank you

Bill E said...

i think the big boys are shorting into the euphoria of obama victory

Pipa said...

what can we expect after this? so lost now.

-Thanks

Bill E said...

no need to panic - i think tonite the dow should bounce abit

Anonymous said...

Hi Bill,

Your call for Dow is right.
May I know your target for Dow next 3 to 6 months? Thanks.

Ken

Bill E said...

anything can happen in 3-6 months - maybe Israel attack Iran ? or fiscal cliff problem solved ?

Bill E said...

if u have not run already yesterday, now is probable good time to take profits on those that already are in profits on

Bill E said...

last nite dow plunge was due to congress still dominated by tea party after this election, meaning looming fiscal cliff not resolved by election.

Anonymous said...

Hi Bill,

Those having a loss should I cut? For example Midas?

Bill E said...

Hi all ,

I recapture my comments high above on 6 Nov here

" i think china related infrastructural stocks should do well due to big stimulus coming in infrastructure to be announced at party congress - cosco , yangzijiang, capland , glp etc but be quick to take profits

6 November 2012 11:15 "

now let us take a look at how each stock has fared if u bought them at the tues close of 6 nov and wed high of 7 nov .

capland : tues close 3.40, wed high is 3.50 - gain of 10c or 2.9%

yangzijiang - tues close 91.5 wed high is 96.5= gain of 5c or 5%

cosco - tues close 91 wed high is 94 gain of 3c or 3%

GLP = tues close is 2.74, wed high is 2.78 gain of 4c or 1%

midas ( i din reccomend this ) - tues close 38c , wed high is 39.5 which is gain of 1.5c or 3.9%

so if u follow my reccomendations, i think u will make on 3 out of the 4 stocks assuming u pay 1% on commission and take quick profits as advised as i expect a reversal in the dow after obama victory

but if u did not take quick profits , u will be sitting on losses today ..

according to my analysis , your mistake comes from
(i) money mgt problem : not quickly take half profits after overcoming comm to protect your trade
(ii) bad entry and exit strategy problem

if u guys got any problems understanding what i mean u should come down to my free previews to discuss

anyway if u bet on obama victory with me before the elections ,u would have made some money from the bookie.

best
bill






to those losing money ,I think your problem is either
(i) buying the wrong stock like Midas which did not move at all in the last 3 days
(ii)

Anonymous said...

Hi Bill,

You are right but Midas was the stock I bought few weeks ago ever since be breeding all the way.

Bill E said...

Hi Pipa ,

i capture my comment this morning here ..

"no need to panic - i think tonite the dow should bounce abit

8 November 2012 05:24 "

and then

" if u have not run already yesterday, now is probable good time to take profits on those that already are in profits on

8 November 2012 09:25 "

Hmmmm , looks like tonite we had a little bounce in the Dow as predicted in the morning ..but of course being right about the dow bounce tonite has not saved your beloved stocks from being pummelled in the afternoon beyond recognition from the morning open... for that I apologize ... come to my preview and let me console you with some good advice.

actually I have bearish about heavy supply at 44c for midas since 3 oct for reasons stated in comments of http://sgxswinger.blogspot.sg/2012/09/myanmese-twin-pumps-yoma-interra.html

what price u bot ?

best
bill

Bill E said...

Hi Pipa

at this point because of the fiscal cliff issue and the way the chart is behaving , I am more bearish than bullish

however I am totally out of the market and I do not proffer an opinion.

best
bill

Anonymous said...

Hi Bill

Cut loss Midas already

Thanks

Pipa said...

thanks for your reply Bill.